Basic Marketing Concepts

First Published: May 29, 2010 | Last Updated:June 3, 2015

Anything that has a value can be marketed. A product, a service, a place, a person, an idea, information , an event, an organization, property or even experiences. However, there are some basic concepts of marketing, which are interrelated, and one building on one before it. These concepts are summarized in the following figure.

Here is a brief Description of the fundamental marketing concepts:

Needs, wants and demands: A need is a state of felt deprivation or feeling of being deprived of something. Human need is the most basic concept underlying the marketing. Need is a part of human nature. There are many kinds of needs such as physical needs, social needs, spiritual needs, etc. Needs are shaped up by culture, personality and religion and they become wants when the need indicate an object to fulfill that need. Wants depend upon the internal as well as external factors. Want is defined in terms of an object that will define the need. If thirst is need, water, a cola drink, or a fruit juice may be the want. If hunger is need, pizza, burger, bread, or chapatti is a want. There may be more than one object that may fulfill a need and this is called a want-list. People have choices to choose a desired object or service from the want-list to fulfill a particular need. However due to limited resources, people want best value of their money. When a want is backed by buying power, it becomes a demand. So if no buying power, no demand. Money is required to create as well as fulfill a demand. This is the most fundamental concept of marketing. The marketer has to know the potential want list of his target market and make them available the best value for their money.

Product: Anything tangible or intangible that is offered to satisfy a need or want is a product. They are called goods (tangible) and services (intangible). The tangible products are physical products, which can be touched or felt or tested, while the intangible products cane only be experienced. For example, a service of a hotel can be experienced (intangible) while food in the restaurant in the same hotel can be tested (tangible). Cars, groceries, computers, places, persons , ideas and informations -everything are objects that have the capability of fulfilling the needs and wants. When products are offered in the markets they are called market offering. A good market offering has to have a good value for money.

Value & Satisfaction: The potential want list may have many products, which may fulfill the need and want of a customer. However, a customer chooses what gives him or her best value for money. There are market offerings for the objects in their potential want list. The market offerings have to provide the best value of the money and satisfaction of fulfilling a want. This is the fundamental concept of marketing, that when there are so many offerings in the market, the customer buys a product on his / her perception. Based upon their own perception the customers estimate the product value and judge whether, it has the capacity of fulfilling their need.

Customer value is a guiding principle. The customer may rank the products as per his / her estimate of a products’ capability to satisfy a need. The price attached to the product may also affect this ranking. Ultimately, the customer chooses a product, which gives him / her best value of his / her money.

Exchange, Transactions and Relationships: As mentioned above, the wants backed by buying power create demand. The demand is fulfilled through exchange. Exchange is the act of obtaining a desired object from someone by offering something in return. Barter is also an exchange. One person cannot make exchange happen. To make exchange happen, two people are required at least. However, the transaction between two people can be a trade. Two people cannot create a market. Three people are at least required to create a market, so that there is competition from at least one side. For exchange to take place, two people are needed. Both of them must have something to offer each other and both of them should have a value to offer each other. Each of them must be free to accept or reject the offer. Both of them must be able to communicate with each other and must be able to deliver what they offering to each other. These are some basic conditions to make exchange happen.Exchange cannot be forced. Both the people must be independent and able to accept or reject one another’s offer. Exchange may be for profit or also for no profit. Whether for profit or no profit , an exchange must give some value to the exchange partners. A successful exchange is a transaction. The transaction is the unit of measurement in marketing. The value associated with transactions is the trade values. A monetary transaction involves money for goods / services and a barter transaction involves good/ service for good / service.A marketer does not want a single transaction. His aim is to continuously make market offerings and the continuous exchanges / transactions create relationships. Today’s marketing is relationship marketing. The focus of marketing is not to get maximum profit from a single transaction but to get long running relationship with the customers. If there are good relationships, the transactions will follow and run long term.

Markets: As we have discussed, an exchange may take place between two people, but three people are required to create a market. There are always many potential buyers and many potential sellers and the set of these potential buyers and sellers is market. A market essentially needs competition (except in absolute monopoly). A market may be a physical market with few shops to a large complexes and shopping malls. A market also may be virtual and today virtual markets are no inferior to the physical markets, thanks to greater access to information technology.